Salesforce Shares Tumble On Weak April-Quarter Guidance

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Salesforce.com, Inc. (NYSE: CRM)

Salesforce reported fourth-quarter and full-year fiscal 2019 financial results after the closing bell Monday. Fourth-quarter earnings and revenue of the enterprise-software company easily beat Wall Street expectations, but shares sank as April-quarter profit and revenue guidance fell short of estimates.

Shares of the San Francisco-based firm were down 3.19% to $153.45 in the extended trading session following the earnings report. The stock fell 3.66% to $158.50 a share during the regular trading session.



CRM Earnings & Outlook

Salesforce had net income of $362 million, or $0.46 per share in the quarter, up from $206 million, or $0.28 per share, in the same period last year. Earnings, adjusted for one-time items, came to earnings $0.70 per share. Group revenues were pegged at $3.6 billion, an increase of 26% from $2.87 billion in the same three months a year earlier.

Fourth-quarter professional services revenues, Salesforce said, were $228 million while subscription and support revenues were $3.38 billion. On average, analysts expected the company to post fourth-quarter adjusted earnings of $0.55 per share on revenue of $3.56 billion, based on figures compiled by Refinitiv. For the full year, the company posted $13.28 billion in revenue.

Looking ahead, Salesforce expects fiscal first-quarter adjusted earnings to be in the region of $0.60 to $0.61 per share on revenue of $3.67 billion to $3.68 billion. Analysts forecast adjusted earnings of $0.63 per share on revenue of $3.69 billion.

For the full year, the company views adjusted earnings of $2.74 to $2.76 per share on revenue of $15.95 billion to $16.05 billion. Analysts model full-year adjusted earnings of $2.75 per share on revenue of $15.97 billion.

Salesforce CEO Comments

“We had another year of outstanding revenue growth, surpassing $13 billion in revenue faster than any other enterprise software company in history,” said Marc Benioff, chairman and co-CEO, Salesforce. “As companies of all sizes turn to Salesforce, we’re enabling them to put the customer at the center of their digital transformation through our intelligent Customer 360 platform. I’ve never been more excited about the opportunity ahead.”

“Our relentless focus on delivering innovation and customer success has fueled our growth and solidified our leadership in the enterprise,” said Keith Block, co-CEO, Salesforce. “This is just the beginning, which is why we’re now targeting $26 to $28 billion in revenue by FY23 – organically doubling our revenue again in the next four years.”

Salesforce.com, Inc. Profile

Salesforce.com, Inc. engages in the design and development of cloud-based enterprise software for customer relationship management. Its solutions include sales force automation, customer service and support, marketing automation, digital commerce, community management, collaboration, industry-specific solutions, and salesforce platform.

It also provides guidance, support, training, and advisory services. The company was founded by Marc Russell Benioff, Parker Harris, David Moellenhoff, and Frank Dominguez in February 1999 and is headquartered in San Francisco, CA. – CNN Money

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